Following are a series of statements regarding topics discussed in this chapter.
Required:
Indicate whether each statement is true (T) or false (F).
(a) Financial statements are the principal means accountants use to communicate financial information regarding business entities to external decision makers such as bank loan officers and investors.
(b) A key advantage of the corporate form of business is that the personal assets of a corporation’s owners are not at risk if the business is sued.
(c) The Securities and Exchange Commission issues most new accounting rules in the United States.
(d) In the U.S., sole proprietorships are the most common form of business organization and account for the majority of business revenues generated annually.
(e) A trait common to most successful business people is an ability to make wise decisions regarding the allocation of their business’s economic resources.
(f) A business’s fiscal year is the 12-month period covered by its balance sheet.
(g) A key objective of independent auditors is to provide assurance as to the integrity of a business entity’s financial statements so as bolster the confidence of third parties in using those statements.
(h) Controller, internal auditor, and cost analyst are common job titles in private accounting.
(i) Because it is a service activity, accounting does not contribute significantly to the success of business organizations.
(j) Reported profits of all multinational companies are not necessarily determined by the same accounting rules.
(k) LLPs, LLCs, and Sub chapter S corporations pay taxes separately from their owners.